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LOS ANGELES--([ BUSINESS WIRE ])--Colony Financial, Inc. (the "Company") (NYSE: CLNY) today announced that it has priced its public offering of 7,000,000 shares of common stock. The Company also granted to the underwriter an option to purchase up to an additional 1,050,000 shares. The offering will generate gross proceeds (before the underwriteras compensation and estimated expenses) of approximately $131.3 million, or approximately $150.9 million if the underwriter exercises its option to purchase additional shares in full. The offering is subject to customary closing conditions and is expected to close on September 12, 2012. On September 6, 2012, the last reported sales price of the Companyas common stock on the New York Stock Exchange under the symbol aCLNYa was $19.35 per share.

The Company intends to use the net proceeds from the offering to repay amounts outstanding under the Companyas revolving credit facility and to fund additional investments, for working capital and for general corporate purposes.

BofA Merrill Lynch is acting as the sole book-running manager for the offering, and may offer the shares at prevailing market prices or otherwise from time to time through the New York Stock Exchange, in the over-the-counter market, through negotiated transactions or otherwise.

The offering of the shares will be made under the Companyas shelf registration statement, which was filed with and declared effective by the Securities and Exchange Commission. The offering will be made only by means of a prospectus supplement and prospectus, which has been filed with the Securities and Exchange Commission. A copy of the prospectus supplement and prospectus related to the offering can be obtained by contacting BofA Merrill Lynch, Attention: Prospectus Department, 222 Broadway, 7^th Floor, New York, New York 10038 or by email at [ dg.prospectus_requests@baml.com ].

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Colony Financial, Inc.

Colony Financial, Inc. is a real estate finance and investment company that is focused on acquiring, originating and managing a diversified portfolio of opportunistic real estate-related debt and equity investments at attractive risk-adjusted returns. Our investment portfolio and target assets are primarily composed of interests in: (i) secondary loans acquired at a discount to par; (ii) new originations; and (iii) equity in single family homes to be held for investment and rented to tenants. Secondary debt purchases may include performing, sub-performing or non-performing loans (including loan-to-own strategies). Colony Financial has elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes. Colony Financial is a component of the Russell 2000 and the Russell 3000 indices.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company's control, that may cause actual results to differ significantly from those expressed in any forward-looking statement.

All forward-looking statements reflect the Companyas good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Companyas future results to differ materially from any forward-looking statements, see the section entitled aRisk Factorsa in the Companyas Annual Report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission on March 9, 2012, the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 filed with the SEC on May 8, 2012, the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 filed with the SEC on August 9, 2012 and other risks described in documents subsequently filed by the Company from time to time with the SEC.